Additional $35 million added to resolve the Cost of Living Allowance dispute
HALIFAX, April 28, 2014 /CNW/ - The SISIP class action lawsuit could benefit thousands more disabled Canadian Forces veterans after the tentative settlement of the one remaining issue—the Government of Canada's calculation of Cost of Living Allowance increases. The proposed settlement, which requires approval by the Federal Court of Canada, is projected to result in an additional $35 million in benefits to the class members.
The SISIP class action was initiated in March 2007 on behalf of representative plaintiff Dennis Manuge and all other disabled Canadian Forces veterans whose Service Income Security Insurance Plan (SISIP) Long Term Disability (LTD) benefits were reduced by the amount of their monthly Veterans Affairs Canada disability pension.
On May 1, 2012, the Federal Court ruled that this benefit reduction was not permitted by the terms of the Policy. Following the decision, the class and the federal government entered into settlement negotiations.
On April 4, 2013, the Federal Court approved an agreement between the class and the federal government, which ended the reduction going forward and provided, among other things, a refund for past reductions plus interest. The estimated total value of the settlement approved in April 2013 was $887.8 million.
During negotiations between the class and the federal government, class lawyers with McInnes Cooper identified an issue with the calculation of annual Cost of Living Allowance increases. It was agreed in the April 2013 settlement that the Cost of Living Allowance issue would be resolved at a later date, either by settlement or a Court decision.
The proposed settlement to resolve the improper calculation of annual Cost of Living Allowance increase is projected to result in an additional $35 million in benefits to the class.
Along with the proposed financial settlement, the class will expand from the original 8,000 members to 14,000 members. The additional 6,000 class members are disabled Canadian Forces veterans who receive long term disability benefits, but those benefits had not been reduced by a Veterans Affairs Canada benefit.
"I'm pleased that this final issue has been resolved and disabled members will receive some added assistance as a result of this case," said Manuge. "McInnes Cooper has continued to look out for us, disabled Canadian Forces veterans, right down to checking what should be straight forward math."
As a result of the proposed settlement, class members will receive 74% of the benefits that they would have received if, following legal proceedings, the Federal Court decided to apply McInnes Cooper's interpretation, plus reasonable interest rates. The settlement provides a refund back to the inception of the SISIP LTD Policy in 1971.
The class is represented by Peter Driscoll and Daniel Wallace of McInnes Cooper and Ward Branch of Branch MacMaster.
"From the outset of the SISIP class-action our legal team said that we will leave no vet behind and we are committed to seeing that through," said Wallace. "We continue to review all elements related to SISIP to ensure Canadian Forces veterans receive what they rightfully deserve."
Class counsel has requested that the April 2013 Federal Court approved legal fees of 8% also be applied to this most recent settlement.
The form of settlement notice will be sent to the class members for their review and materials also will be available on www.leavenovetbehind.ca. The settlement approval hearing is scheduled to be heard in the Federal Court in Halifax on June 20, 2014.
SOURCE: McInnes Cooper
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